Bank of the Republic,
New York, March 9, 1861.
My Dear Sir: I have yours 5th inst. I had a letter from Mr. Memminger on the subject of the Loan[i] but I could give him no encouragement here at present.
You know that all loans are founded on or have reference to London. At this time money is worth 8 and 10 pct. in London, and Europe has to buy a large amount of bread-stuff as well as to pay for the usual amount of cotton, and to pay in gold; for we are furnishing both the provisions and the cotton and are taking no goods, comparatively. In addition to which they are sending out American stocks of all kinds for sale here, as well to raise money as to secure their investments, which in the disturbed state of the country are in jeopardy. These, with the trouble in the currency at the West, based upon State stocks, which are falling and as they decline are requoted by the Bank Department to be increased in quantity or to be sold to make good the currency. I do not believe Virginia, Missouri or Tennessee will pay their July interest, and perhaps N. Carolina may falter too. These apprehensions no doubt prevent these more cautious men from encountering the expense of Secession.
As you are engaged in revising and making a permanent Constitution I trust that it will be done strictly with the warnings of past experience before you, and that free trade will be prominently set forth. It is your sheet anchor, your best bower, your main stay. It can be made to operate as a two-edged sword in winning Europe to your support and distracting the course of the Northern elements of abolition.
Open your ports by treaty with England or France on the principles of perfect free trade—and what would New York do? She would open free trade too within 6 months, if she had to cut loose at Albany and join the South.
So too, if England join, France must, as well as Germany; so a treaty with one would necessitate a treaty with all of them. Again, the West in is favor of free trade and they would cut loose from New England and Pennsylvania and join the movement, either in a separate confederation or by joining you; and then where would New England be?
I am glad to know there is to be no reconstruction with the North generally, not even a consideration of such a thing. I tell you the North will sooner or later invade the South to emancipate the slaves, Union or no Union. Did you not see that in the last few days of the recent Congress? They unanimously voted that Congress had no power to interfere with slavery in the States. A few days later, the compromise measures of the Republican party being under consideration, 68 of them refused to vote that the Constitution should not be altered—to give Congress the right. There is the expression of the intention to alter the Constitution as soon as they can do it with that purpose.
I think you will find the expense of impost system very great, with all the cutters, etc., etc., and the guarding all points to prevent smuggling, when a small pr. ct. on taxable property would pay enough and more too. Take Georgia for instance, 6¢ on the 100$ pays $450,000 a year, then 60¢ would pay $4,500,000, and the collection would not cost exceeding 2½ pct. to receiver and 2½ to collector. The issue of treasury notes by the S. Confederacy in sums of 25$, 50$ and 100$ and 500$ bearing interest at 3 pct. would pay all your debts. These being recd, in payment of all dues would give them currency to amt. 5, 8 or 10 millions to which amount the issue should be limited. And they should be a legal tender within the Confederacy except to and by the banks, which should be compelled to pay their notes in coin to keep a stable currency. Then, when the quantity issued began to exceed the demand they would begin to depreciate and go below par. When parties have taxes or duties to pay they would buy them and pay them in and thus reduce the taxes a little. But they should be fundable also at the beginning of any month for 8 pct. bonds payable on long time and irredeemable till the time expired, which would make them the more valuable; and this would absorb the surplus and keep the notes current and dispose of the bonds at the same time.
The Northern people do not sympathise in the secession movement, and tho’ not favorable to war, except the Republican party, yet they would rejoice to hear that Maj. Anderson had repulsed an attack, etc., etc., of that hue.
The Democratic convention did immense good in declaring against war on the South. But the resolutions were hollow and deceptive. In the general that party showed their rottenness and unreliability at the Charleston convention. Their leaders never had any inducements to hold with the South except for the spoils, and as the South can afford no more aid to them in that line within the U. S. Union they must seek bread and butter elsewhere. Their adversaries have the run of the kitchens both in the Federal and state offices; and anything that will enable them to displace them in either will be greedily snatched at. And on the contrary any and every thing to keep them out of doors will be despitefully resisted. So if the South keep the peace, give no occasion to excite the popular feeling against her, the good Democracy will hold with her for popularity’s sake. But any error or mistake or outrage, however small, would be so horrible to their prospects they would outrun the Republicans in hostilities against you, the spoils being the motive. . . .
[P. S.] Get your new constitution out and publish it ; have it voted on and then write the other slave states to join, or write them to lay it before their people to be voted on by them. . . .
[i] The loan of $15,000,000 at 8 per cent, authorized by act of the Provisional Congress of the Confederate States, Feb. 28, 1861.
From Annual Report of the American Historical Association for the Year 1911.
Gazaway Bugg Lamar (1798-1874) was an American merchant in cotton and shipping in Savannah, Georgia, and a steamboat pioneer. He was the first to use a prefabricated iron steamboat on local rivers, which was a commercial success. In 1846 he moved to New York City for business, where in 1850 he founded the Bank of the Republic on Wall Street and served as its president. He served both Southern businesses and state governments. After the start of the American Civil War, Lamar returned to Savannah, where he became active in banking and supporting the war effort in several ways. With associates, he founded the Importing and Exporting Company of Georgia, which operated blockade runners.
Lamar and Cobb were cousins by marriage.
Howell Cobb was an American political figure. A southern Democrat, Cobb was a five-term member of the United States House of Representatives and Speaker of the House from 1849 to 1851. He also served as the 40th Governor of Georgia and as a Secretary of the Treasury under President James Buchanan. Cobb is, however, probably best known as one of the founders of the Confederacy, having served as the President of the Provisional Congress of the Confederate States.